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Cyprus: Offshore Legal and Tax Regimes

Forms of Offshore Operation

Offshore entities took the following forms:

NB: See above for new rules applying to Cyprus companies from 2003.

Checks are made to exclude undesirable operations, and conditions are usually imposed:

  • The entity must be entirely foreign-owned
  • The objects of the business and sources of income must be outside Cyprus
  • No local borrowing is permitted
  • Audited annual accounts must be filed with the Central Bank
  • Local payments must be recorded and reported

Anonymity may be achieved by using nominee shareholders; the beneficial owners must be made known to the Central Bank, which is then statute-bound to non-disclosure. NB There is no provision under the law for migration or re-domiciliation.

The expression 'International Business Company' (IBC) simply refers to a duly authorised offshore Limited Liability Company. There are no formal requirements in addition to those in standard Cyprus company law, but the Central Bank recommends a minimum authorised share capital of CY£10,000. This does not have to be paid up, unless the company concerned wants to make use of the import duty concessions described in Tax Treatment of Offshore Operations.

 

 

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